The Investment Approach of Parlan Financial Corp.

Our Proprietary Algorithm

We use a proprietary trading algorithm that relies on quantitative research, technical analysis and historical price movements of the S&P 500 to adjust daily market exposure.

What this all means is that we have a written plan of action about how to invest. This plan has been reduced to a mathematical formula and written in software that Parlan Financial has created and owns 100%. We use mathematical formulas and historical patterns within the algorithm to create the rules of engagement pertaining to what we do each day.

In mathematics and computer science, an algorithm is a step-by-step procedure for calculations, data processing, and automated reasoning.

The Basis of the PAMS Algorithm

The basis for the Parlan Financial algorithm is a statistical phenomenon referred to as Mean Reversion.

It involves first identifying the trading range and then computing the average price using analytical techniques as it relates to the stocks in the S&P 500. Applying Mean Reversion is when the current market price is less than the average price, the stock is considered attractive for purchase, with the expectation that the price will rise.

When the current market price is above the average price, the market price is expected to fall; therefore deviations from the average price are expected to revert to the average.

And that is just the beginning. From here begins the process of determining how much of the investment it makes sense to purchase, given many other technical indicators.

The Algorithm Design

The algorithm also has within its design the ranges of what price to buy and how much profit or loss to accept.

Think of the stock market as a pair of lungs: They must inhale and exhale. The markets follow a pretty predictable cycle – they will produce gains, contract, produce gains, contract and so on and so forth. One major variable is the timing. National crises like the sequester and the inevitable build up before them are accounted for in our algorithm that strives to produce positive returns in all market environments. Our approach is to follow our formula with discipline.